Sometimes in businesses, big companies go through a rough situation where they will have to take significant decisions to and that’s what’s is happening with Tesla. Because recently the company has decided to layoff approximately seven percent of its total staff and this news is negatively impacting on the company’s stocks. It seems like the investors of the company are not happy with this decision of the company, and that’s why the company’s shares have fallen by more than 10% on yesterday. Now many speculations are going on into the market about Tesla because many experts think that the company must’ve hired more employees than its requirements and now the company is considering to save the money by laying off these employees. The automobile industry is already going through a tough phase, and this could be the result of it.
While addressing the press conference the CEO of the Tesla Inc. said that company needed to take this decision to produce more of its Model 3 cars and by laying off the employees the company would be able to use the funds in the production of these cars. However, the problem with the Tesla is deeper because even after recording the right amount of profit in the last quarter the company is still suffering from lack of liquid funds. The company’s cash flow is still low, and that’s the reason Tesla has decided to opt for a cost-cutting option.
In a new Detroit’s auto show many big companies like GM, Ford, Volkswagen unveiled their vision of electric vehicles which shows the level of competition in the EV industry. According to some experts, the company will have to make some significant changes in its production because this cost-cutting is just a temporary solution and to get out of this misery it will have to achieve bigger targets.